Developing individual competencies profile and application to fpt corporation

V IE T N A M N A T IO N A L U N IV E R S IT Y HANOI SCHOOL OF BUSINESS TRUONG VU THANH THU Y DEVELOPING INDIVIDUAL COMPETENCIES PROFILE AND APPLICATION TO FPT CORPORATION Major: Business Administration Code: MASTER OF BUSINESS ADMINISTRATION THESIS S U P E R V IS O R : NGUYEN NGOC ANH H A N O I, 0 TABLE OF CONTENT ABSTRACT TÓM TAT ACKNOW LEDGMENTS TABLE OF CONTENT CHAPTER INTRODUCTION LITERATURE REVIEW 2.1 Competencies concept 2.1.1 Organizational core com petencies 2.1.2 Individual competence 2.1.3 Linkages between organizational core com petencies and individual competencies 2.2 Identify core competencies 2.3 Build individual based com petencies profile 2.4 Application o f individual com petencies profile 2.5 Com petencies’ roles APPI ICATION TO FPT CORPORATION 3.1 Methodology o f building individual based com petencies profile 3.2 Application oflB C P into human resource management 3.2 ! Competencies based-W ork design 3.2.2 Competencies based-Recruitm ent and selection 3.2.3 Competencies based-Perform ance management 3.2.4 Competencies bascd-Training 3.2.5 Competencies bascd-Otlicr application LIMITATION OF THE THESIS 67 CONCLUSION 68 APPENDICES A FPT ORGANIZATIONAL CHART 69 B SAM PLE INDIVIDUAL COM PETENCIES PROFILE 71 C COM PETENCIES BASED CAREER PATH M ATRIX FOR FPT 84 D QUESTIONNAIRES FORM 85 REFERENCES 89 LIST OF TABLE xi LIST OF FIGURE xii x LIST OF TABLE Steps to identify competencies profile for FPT LIST OF FIGURE Competence component Top-down and bottom-lip approach Relation between competencies, HR practice and business strategy Competencies base work design method Competencies based perform ance m anagem ent m ethod Competencies based training process Chapter INTRODUCTION M anaging activities internal to the firm is only part o f the modern executive’s responsibilities The modem executive must also respond to the challenges posed by the firm interm ediate and remote external environment The intermediate external environm ent includes competitors, suppliers, increasingly scare resources, government agencies and their ever more numerous regulations, and customers whose preferences often shift inexplicably The remote external environment comprises econom ic and social conditions, political priorities, and technological developm ents, all o f which must be anticipated, m onitored, assessed, and incorporated into the executive’s decision making However, the executive often is compelled to subordinate the demands o f the firm ’s internal activities and external environment to the m ultiple and often inconsistent requirem ents o f its take holders: owners; top m anagers; employees; communities; customers; and country To deal effectively with everything that affects the growth and profitability o f a firm, executives em ploy management processes that they will position it optimally in it competitive environm ent by maximizing the anticipation o f environmental changes' and o f unexpected internal and com petitive demands Once they foresee the changc they can define their company, its market, and its core com petence in order to support com petitive advantage and to help company prosper sustainably " Think o f a diversified com pany as a tree: the trunk and m ajor lim bs as core products, sm aller branches as business units, leaves and fru it as end products N ourishing and stabilizing everything is the root system: core competencies Focusing on core competencies creates unique, integrated system s that reinforce fit am ong yo u r firm 's diverse production and technology skills-a system ic advantage yo u r com petitors c a n 't copy However, who m akes up the corporate core com petencies? And who creates the unique? It is the human The advantage that the corporate can achieve is depended on the efforts o f individual, or the individual com petencies A lthough the concept about individual com petence was developed long tim e ago in the world, it is about to appear widely in Vietnam M any consulting firms have used com petencies based methodology as a tool to upgrade corporate initiative especially in human resource management Base on this scenario, in this thesis, the author want to systemize the idea about the organization core com petencies and individual com petencies for further understanding and applying the com petence concept By identifying the linkage between individual com petencies and the organizational corc com petencies, and the role o f the core com petencies in an organization the author gives the answer about w hy organizations should focus on developing the individual com petencies profile and use that profile as a strategic hum an resource m anagem ent to upgrade the hum an capital, one o f the m ost im portant factor that helps to bring the success to the organization For illustration, the author analyzed the need to develop individual com petencies profile for FPT Corporation and the application o f competencies based m ethodology in its strategy o f developing human resource ! C.K P rah alad and G ary H am el, "T h e corc com petence o f the c o rp o ratio n ” 2001 Harvard ¡Justness Review April ( b a p t e r L IT E R A TU R E REVIEW 2.1 C o m p e te n c ie s C o n c e p t 2It is said that the history o f com petencies as a developm ent tool dates back to the 1960s when the U.S Naval Department becam e interested in determ ining why some subm arine com m anders consistently perform ed better than others Since most o f these officers had sim ilar work experiences and academ ic backgrounds, there was an interest to find out if there were some differentiators that influence their ability to perform At that time, the help o f Harvard behavioral scientist David C M cClelland and a social scientist David Berlew was sought and so the two proceeded with devising an approach based on M cC lelland’s theory o f motivation and which focused on an individual’s relative level o f need for affiliation, power and achievement A trained researcher used a technique called “behavioral event interview ” and in the process, asked subjects to tell stories about how they perform ed their jobs, decisions they found to be most difficult, and how they' handled situations that did not go well Unknown to the researcher was the fact that certain subm arine com m anders were consistently high perform ers while others were consistently considered as average T his mix o f perform ers had been sclcctcd to determ ine w hether or not a common set o f differentiating behaviors emerged from the interview s with the high perform ers It was concluded that there was a statistically significant correlation among the behaviors described during the interview by the com m anders who had E rnesto G E spinosa, FPM , Competence, (http ://w w w p m ap o rg p h /n ew sletter/ap ril/fro m d esk h tm ) records o f high perform ance This research approach becam e the accepted method for com petency m odeling in the years to come N ow adays, the word “com petencies” is used in m any contexts, with very different meaning O ver the years, com petencies have been used to denote organizational or business com petencies as well as individual or em ployee com petencies Bellow ing is the review o f com petencies concept that is classified into organizational core com petencies and individual com petencies 1 O r g a n iz a t io n a l C o r e C o m p e te n c ie s O rganizational core com petencies are those capabilities that are critical to a business achieving com petitive advantage The starting point for analyzing core com petencies is recognizing that com petition betw een businesses is as much a race for com petence m astery as it is for market position and market power Senior m anagement cannot focus on all activities o f a business and the com petencies required to undertake them So the goal is for m anagem ent to focus attention on com petencies that really affect com petitive advantage The main ideas about core com petencies o f the corporation w ere developed by C K Prahalad and G ary Ham el through a series o f articles in the H arvard Business Review followed by a best-selling book - C om peting for the Future Their central idea is that over tim e com panies m ay develop key areas o f expertise which are distinctive to that com pany and critical to the com pany's long term grow th.1 Strategy-Core competencies ( h ttp ://w w w tu to r2 u n c t/b u sin e ss/strate g y /c o re _ c o m p e te n cie s.h tm ) "In the 1990s m anagers w ill be ju d g e d on their ability to identify, cultivate, and exploit the core com petencies that m ake grow th possible - indeed, they'll have to rethink the concept o f the corporation it self ” C K P rahalad and G H am el 1990 These areas o f expertise may be in any area but are m ost likely to develop in the critical, central areas o f the com pany w here the most value is added to its products For exam ple, for a m anufacturer o f electronic equipm ent, key areas o f expertise could be in the design o f the electronic com ponents and circuits For a ceramics m anufacturer, they could be the routines and processes at the heart o f the production process For a software com pany the key skills may be in the overall sim plicity and utility o f the program for users or alternatively in the high quality of softw are code w riting they have achieved A com petence which is central to the business's operations but w hich is not exceptional in som e way should not be considered as a core com petence, as it will not differentiate the business from any other sim ilar businesses For example, a proccss which uses common com puter com ponents and is staffed by people with' only basic training cannot be regarded as a core com petence Such a process is highly unlikely to generate a differentiated advantage over rival businesses H ow ever it is possible to develop such a process into a core com petence with suitable investm ent in equipm ent and training It follows from the concept o f core com petencies that resources that are standardized or easily available will not enable n business to achieve a com petitive advantage over rivals In 1994, Fogg C D defines organization core com petency as "those few internal com petencies at which you are very, very good, better than your com petition, and 77 Takes responsibility for contributing to team goals and inspires trust amongst colleagues Respects and values others acting as a role model for the organization's values C om m unicates vision and the longer term strategic view Learning ability Absorbing new information and ideas and applying them effectively M M a n a g in g C h a n g e The ability to dem onstrate support for innovation and for organizational changes needed to im prove the organization's effectiveness; initiating, sponsoring, and im plem enting organizational change; helping others to successfully manage organizational change M a n a g i n g P e r fo r m a n c e The ability to take responsibility for one's own or one's employees' performance, by setting d e a r goals and expectations, tracking progress against the goals, ensuring feedback, and addressing perform ance problem s and issues promptly M a n a g i n g S y s t e m s and P r o c esse s Effectively uses systems and processes to measure, monitor, manage, or impact perform ance M o tiv a tio n ' The ability to enhance others' commitm ent to their work N N e g o tia tio n a n d C o n flic t M a n a g e m e n t Negotiates or m ediates sound agreements in business or organizational situations where there is disagreem ent or difference in interests N etw ork in g Constructing relationships and networks which are useful in achieving objectives; making effective use o f informal networks to get things done Develops and m aintains good working relationships with others 78 O ral C o m m u n ica tio n The ability to express oneself clearly in conversations and interactions with others O pen C o m m u n ica tio n Engages others in active, open, and productive dialogue O r g a n iz a t io n a l A gility Understands how to get things done and achieve objectives working with others in an organizational context O r g a n iz a t io n a l s e n sitiv ity Recognising the effects and results o f one's own decisions or activities on other parts o f the organisation; recognising the interests o f other parts o f one's organisation O r g a n iz a t io n a l lo y a lty Bringing one's own behaviour into line with the culture, requirem ents, priorities and goals o f the organisation P P a ssio n for S u c c e s s Continually focuses on achieving positive, concrete results contributing to organization’s business success ' P erform an ce M an agem en t Set clear goals for self or others, assigns responsibility, measures perform ance, and seeks and delivers feedback to achieve quality, tim ely results P e r s u a s iv e C o m m u n ic a t io n The ability to plan and deliver oral and written com m unications that make an impact and persuade their intended audiences P e r s o n a l C r e d ib ility Demonstrated concern that one be perceived as responsible, reliable, and trustworthy P la n n in g , O r g a n iz in g , and C o o r d i n a t in g 79 Efficiently develops and im plem ents plans to accom plish goals P r o b le m S o lv in g Gathers and analyzes in formation and uses it to develop effective solutions to difficult problem s or situations Identifies problem s and analyses relevant inform ation; solves problem s providing the most effective way o f resolving issues; creative in suggesting solutions to problems; consults staff and other people when relevant; takes decisions when appropriate bearing in mind organization, custom ers and staff needs Problem analysis Identifying problem s; recognising significant inform ation; m aking connections between data; tracing possible causes o f problem s; investigating relevant data Q Q u a lity o r ie n ta tio n Setting high standards regarding the quality o f products and services and acting accordingly R R e p r e s e n t i n g O r g a n iz a t io n ' Projects a positive and professional image o f organization in all contacts R e su lts O r ie n t a tio n , * The ability to focus on the desired result o f one’s own or one's unit's work, setting challenging goals, focusing effort on the goals, and m eeting or exceeding them R e a s o n in g Ability to solve practical problem s and deal with a variety o f concrete variable in situations w here only limited standardization exists Ability to interpret a variety o f instructions furnished in w ritten, oral, diagram, or schedule form Ability to conclusions define problem s, collect data, establish facts, and draw valid 80 Ability to interpret an extensive variety o f technical instructions in mathem atical or diagram form and deal with several abstract and concrctc variables R e w a r d in g A b ility Ability to apply different rew arding system for different em ployees appropriately to m otivate them R isk T a k in g Propose new idea for new project, bear risk to im plem ent the project S S e lf D is c ip lin e , Try best to fulfill planned jobs Strict and honest to o neself in term s o f thinking and action: mean w hat you say and say what you mean S e lf D e v e lo p m e n t Actively seeks to understand one own strengths and w eaknesses, and works continuously to improve, or Possessing insight into one's own strengths and w eaknesses; on this basis, initiating activities to increase/enhance one's knowledge, skills and com petencies in order to perform more effectively S e lf C o n f i d e n c e Feels successful in past undertakings and expects to succeed in future activities, or Faith in one's own ideas and capability to be successful; w illingness to take an independent position in the facc o f opposition S elf-organization Organising one's own work effectively by form ulating objectives and planning activities; focusing available time and energy on m ajor issues and critical problems Social C a p ita l 81 The ability to develop, m aintain, and strengthen partnerships with others inside or outside the organization who can provide inform ation, assistance, and support S o c ia b ilit y M ingling effortlessly with other people; at ease when approaching others or on social occasions S e n s itiv ity Show ing oneself to he aw are o f other people and the environm ent and o f one's own influence on both Behaviour reflecting recognition o f the feelings o f others S tr a te g ic T h in k in g U nderstand the business, and anticipates and develops business priorities for future action The ability to analyze the organization's com petitive position by considering market and industry trends, existing and potential custom ers (internal and external), and strengths and w eaknesses as com pared to com petitors, or The ability to analyze the organization's com petitive position by considering market and industry trends, existing and potential custom ers (internal and external), and strengths and weaknesses as com pared to com petitors S tr a te g ic L e a d e r s h ip Creates a shared purpose, vision, or direction for his/her group or organization, and inspires others to work toward it S tr ess M a n a g e m e n t The ability to keep functioning effectively when under pressure and m aintain self control in the face o f hostility or provocation S tr ess T o le r a n c e Continuing to perform effectively disappointment and opposition T Teamwork when facing time pressure, adversity, 82 C ontributing actively to a joint result or solution to a problem , even when such team work concerns a m atter which is not o f immediate personal interest T e c h n ic a l E x p e r tis e The ability to dem onstrate depth satisfactory level o f technical and professional skills in job-related areas Keeping abreast o f current product developm ents and trends K now ing w here to get in-depth expertise on specific technical areas U nderstanding technical term inology and developm ents K now ing how and when to apply a technical skill or procedure Synthesizing new solutions to problems based on professional principles T e n a c ity Staying with a plan o f action or point o f view until the desired goal has been attained or is no longer reasonably attainable T horoughness Ensuring that one's own and others' work and inform ation are complete and accurate; carefully preparing for meetings and presentations; following up with others to ensure that agreem ents and commitments have been fulfilled U U s i n g / m a n a g i n g r e so u r c e s ' Uses IT effectively including organization information systems and other software packages related to own job; manages own time; deploys and/or uses resources efficiently; seeks opportunities to reduce costs and achieve value for money; understands financial procedures and m onitors budgets V V isio n Standing back from day-to-day activities; concentrating on m ajor issues and long­ term policy V isio n S h a r in g 83 Create a shared purpose, vision, or direction for his/her group or organization, and inspires other to work toward it Working with people Deals with people honestly and fairly and values diversity; builds and maintains effective w orking relationships with colleagues/ow n team ; is a team player; is flexible and switches betw een different team roles; helps others develop perform ance; encourages innovation and contributes ideas for (cam improvements; is aw are o f strengths and needs for im provem ent w ithin the team W r it t e n C o m m u n ic a t io n The ability to express oneself clearly in business w riting I 84 A P P E N D IX C : C O M P E T E N C IE S R A SED C A R E E R PA T H M A T R IX FO R FP T Forecast future im pact on technical/ functional Personal i m p r i n t on Dc \ clop w orking Develop customer FPT st yle, care (personal develop­ policies environ­ ment and strategic ment to F P T influcnccculture othcr-level Balancing sectorial Deepening demand analytical and other train thin kin g, n e t w o r k in g reengineer business Vision and direction n s y s t e m decision making and oriented process Rcstructur c Manage C o r p o r a ! io oriented about potential customer participate C u s t o m e r in d e v e l o p s e g m e n t a ­ Deepening manag e ability t o company t i on, working st y l e a n d p a r t i c i p a t e business corporate in b u i l d i n g a n d c ustomer motivate culture other bout intrapre­ neurship spirit P a r t i c i p a t e N e t w o r k i n Risk in Social g a n d taking, c api t al represent passion for and team FTP success in spirit doing building business process care policy Specialisi Communic m in w i d e r a t i o n skill context Deepening expertise o f s e lf Lev T echn ical F u n ction » el S elf develop­ ment Understan d FPT culture Participate in social activities C ulture Individual Excellence Understan Understan about cTcustome d r focus” creative motto, develop selling and comm uncation skill C ustom er Intrapre­ Relation neurship Manage team working process Sharing and carrying out vision contribute lo re­ direction matching own business direction with strategy Time manage­ Understan d ment F P T vision and mission personal process M an age­ ment Leader­ ship The level column refers to llie hierarchy level, which are: individual (level 1), team leader/business strategic unit leader (level 2) member com pany manager (level 3), FPT board o f director (lever 4) The other six columns refer to group o f competencies 85 'There are shaded box in the table show the groups o f com petencies that should be focused in terms o f each hierarchy level A P P E N D I X I): S U R V E Y F O R M CODE: QUESTIONNAIRES / 02.01 Full name Position D epartment/center Company T e c h n ic a l level r e q u ir e m e n t Which is the minimum required certificate to be in the position: a High school graduate b College c Bachelor d Master c Above What is the required special certicifate for the function? List to knowledges in the area o f your functional background and evaluate the level o f each 86 Level Level Level Level Less necessary Fairly necessary Necessary Much necessary This This The knowledge knowledge job is This knowledge is an advantage, is fairly helpful perform ed better is but is not affect for perform ance with factor much to the this knowledge the success for the performance performance Knowledge 4 • C o m p e te n c ie s r In following com petencies, please evaluate level o f necessity for each o f them The level is from to and explained clearly in the table below Level Level Level Level I ess necessary Fairly necessary Necessary Much necessary This competency 'This compctency The is an advantage, is fairly helpful perform ed better is but is not affect for perform ance with factor much to the job competcncy is this This compctency the success for perform ance the 87 performance C o m p e t e n c ie s L e a d e r s h ip b u ild in g ] Strategic Thinking Vision Sharing In d iv id u a l e x c elle n c e Intellectual Horsepower 10 S elf Discipline 11 12 13 C u ltu r e 14 Social Capital 15 Open Communication 16 17 18 In tr a p r e n e u r s h ip 20 Passion for Success 21 22~~ C u s t o m e r R elation 23 24 I Representing FPT Custom er Oriented ■ 88 26 27 M anagem ent 29 - Planning, O rganizing and Coordinating 30 Em ployee Em pow er and Delegation 31 32 33 / 89 REFERENCES I Boynt/is, Richard F (1982) The Competent M anager: A Mode! fo r Effective Performance New York: John Wiley & Sons, Inc Nemcrov, Donald S and Schoonover, Dr Stephen (2001), SHRM White Paper: Competency-Based HR Applications Survey: Executive Sum m ary o f Results Alexandria, VA: Society for Human Resources M anagement Pritchard, Kenneth H., (1997), SHRM Competencies A lexandria, VA: White Paper: Introduction to Society for Human Resources M anagement Spencer, Lyle M and Signe M (1993), Com petence at Work, M odels fo r Superior Performance New York: John Wiley & Sons, Inc Sommer, Roger D (1998), SHRM White Paper: Behavioral Interviewing Alexandria, VA: Socicty for Human Resources Management Wood, Robert and Payne, Tim (1998), Com petency Based Recruitment and Selection: A Practical Guide Chichester, England: John Wiley & Sons, Ltd American Compensation A ssociation (1996) Raising the Bar: Using Com petencies to Enhance Em ployee Performance Scottsdale, AZ: ACA Boyatzis, R E (1994, January) R endering unto com petence the things that are competent American Psychologist, 64-66 ' Dubois, D D (1993) C om petency-based perform ance improvement: a strategy fo r organizational change Amherst: HRD Press Inc 10 Dubois, David D (1996) The Executive's Guide to Com petency-Based Perform ance Im provem ent Amherst MA: HRD Press Inc 11 Fogg, C D (1994) Team-Based Strategic Planning New York: Amacom 12 Futnham, A (1990, June) A question o f competency Personnel M anagement, p 37 13 Lado, A and W ilson, M (1994, Vol 19, No 4) Human resource systems and sustained com petitive advantage: a com petency-based perspective Academy o f M anagement Review, 699-727 90 14 Lewis, J (1996, February 26) Whal m akes com petency-based program s succeed? Canadian HR reporter, p 15 M cClelland, D.c.(1973) Testing for com petence rather than fnr iufrlligcncc American Psychologist, 2K, 1-14 U) M cClelland D C (1094, January) The kiwwlerfge-lesting-eritfcntiana/ complex strikes hack American Psychologist, 66-60 17 Zemkc, R (1982) .Job com petencies: can they help you design better tra ining/ Training, Vol 19 (5), 28-31 18 C.K Prahnlad and Gary Hamel (2001, April 1) The core com petence o f the corporation Harvard Business Review 19 W eightman, Jane (1994), Com petencies in action, Institute o f Personnel and D evelopm ent 20 M arshall, Patricia (1996), "W hy are som e people m ore successful than others?", in People and com petencies, edited by Nick Boulter, M urray P n icl and Jackie Hill, Kogan Page, sccond edition 21 Ducci, M aria Angelica (1997) E! enfoque cie com petencia Inborn! en la perspective! internacionai In: Formacion hasada en com petencia lahoral Cinterfor/ILO M ontevideo 22 Trickland, Thompson (1996) Strategic M anagem ent: Concepts and cased Irwin Book Team p 107 2.1 Pamela J M arshall, M.F.d., SPHR (2002) C om petency-based interviewing: Hiring to Fit your A ssociation's Culture 24 Richard s M ansfield, Building com petencies m odels: Approach fo r HR professional 25 h U p : //p m tiio k o n ip c tc n s n c l/in ilc \.! -1 h tm l h l l p : / \ v \ \ \ \ ¡ I j a h i c o m p e l \ i c e s ' e o r p o m k - c o m p e t e n t -i c s s h l i n ) 27 hllp:/7\ v \ \ w q u i c k m h i i c o m h t t p : /Avvv\v.s u i t c 29 101 h l l p : / / w \ v \ v l u m a - n L ',1 91 30 http://coiTipe te n c v a n d e i.com / 31- 1ittp://fị )t.com.vn i ... flexible and evolve over time As a business evolves and adapts to new circumstances and opportunities, so its Core Competencies will have to adapt and change 2.3 Build Individual Based Competencies Profile. .. 3.1 Methodology of Building Individual Based Competencies Profile FPT individual based competencies profile (IBCP) is identified by integrating the top-down and the bottom-up methods, which stated... Table 3.1:Steps to identify competencies profile for t^T corporation Step Content Step Interview Top Managers to Identify the key success factor of FPT, strength, weakness, and FPT structure Step